BTJ paper trade 6/29 -7/2 Was away when BTJ signalled earlier in the morning, so I decided to try to get in later in the afternoon if I saw that it was going to move higher. At around 1:50, it seemed like it was getting ready to do so. Stochastic was still within the 80-100% range although MACD was starting to drift into negative territory. I decided to get in at 43.97 with a 2.5% stop. Soon after I got in the general market plunged (probably from London bomb scare), and BTJ moved slightly lower. However, it never really moved out of the area of consolidation it had set during the early afternoon. I took this to be a positive sign and decided to keep the stock overnight even though it never hit FRV. This morning, BTJ gapped up, fell a little bit, and then recovered to move much higher. I had already decided to set a target at 10%, so when it crossed this point at around 12:15, I sold at 48.36 for approximately a 10% gain. I may be leaving money on the table by selling out early in the day, but I think until I get good at doing these trades, that it's best to just sell out at a predetermined price. That way I won't feel badly if the stock were to go back down later in the day. Later, as I get better this I will finesse my exits to get better returns. I also have to keep in mind that since this is an AMEX stock and the spread was quite wide, I'm not sure if I really would have gotten filled at the prices that I've indicated.
I'm still keeping up with the Hershey trading method. Have read up to page 600 of Journal 2 - rereading journal 1. I'm cutting and pasting important info out of journal 1 that I will print and then keep in a notebook to have on hand. Review is helping a lot. I've posted all of my (paper) trades on my blogsite if anyone wishes to view them. I'll try to remember to post them in this journal as well, but it takes an extra effort and it's nervewracking as well. I'm keeping track of short trades in a separate spreadsheet as I don't intend to trade shorts immediately when I resume real trading. Posted below is my second try at a short trade.
Recieved signal in second half hour, MACD was slightly negative, stochastic had moved below 20. Price was around 24.9 at time of signal. Waited first for it to fall below suppport at 24.65, then I waited some more to see if it would bump its head on the support which could now be considered resistance. It looked like it had done so, so I got in at 24.68 with a stop at 25.26 - slightly more than 2.5%. My target was at 23.53. I watched it move up to 24.95 almost immediately, but then it hit resistance at the 50 MA and moved down slowly (painfully) from there. Volume petered out and it didn't go anywhere for the rest of the day. I reasoned that it should break out again at around 2:30 if it was going to do anything at all, but by 3 pm it looked like it wasn't going to move much lower. Looking back at previous days, it didn't seem as though there is much activity in this stock in the afternoon, so I decided to get out with a small profit of .8%. I consider this to be a wash trade. Stock dropped about half an hour later down to 24.09. Lesson - get out when it hits stop, target, or EOD. Not before!! Also, I know that I'm probably not following the shorting method correctly. I haven't read the early part of Journal 3 yet (where I think shorting is described in more detail). This is why I'm listing these trades separately from my long trades. So why do them at all? Boredom I guess. I like to have a trade to follow while I'm reviewing the other threads, but perhaps I ought to review the rules for shorting before I do any more so that I don't create bad habits.
Posted below are my total paper trades for June and July using the Hershey method. Total returns are based on each trade being 1/5 of my total trading account. In June, JADE, CHDX, and BTJ all had a good return in the first day only to be lost subsequently (after I had pulled my stop up to breakeven). This prompted me to switch to a daily strategy. Profit seems to be about the same, although there were fewer signals in July than June (keeping in mind that I started to paper trade in the middle of June). The one failed trade, JSDA, did so because I didn't obey the rules. That is, I tried to get in late in the day when I saw a large volume surge thinking that it would hit FRV at the end of the day. This turned out not to be the case and resulted in a small loss. I think that in markets such as we've been having over the past couple months - that is, the market is trading in a range and experiencing a lot of volatility - that it would be better to daytrade these signals as opposed to holding them as swing trades. When the market stabilizes and begins to trend again then I will hold them longer. I haven't reported here the three shorts that I did, for very small profits, and the unusual volume breakouts, which I'm just starting to do. These will be tracked separately.
That's pretty good trading ... how long before you plan on going live? Depending on your financial situation, I would say you could probably do it within 3-6 months if you continue to hold your consistency and profitability. Jimmy Jam
Very nice results. Excellent work in keeping losses to a minimum, I really hope you keep that up... Good luck when you go live! TNG
Thank you for the positive comment. My plan is to open a small (very small, around 5000$) IB account in September and practice using their simulator for a couple of months before I trade for real. Currently I have an Etrade account, but their fees are way too high to practice small trades. I know that I won't be making much to start, but its not the profits that really matter at this point. It's obtaining the experience and emotional discipline that I will need once the account grows bigger.
Bumming right now on two missed opportunities. On my DU watchlist for today was JSDA, NGA, and IIG. NGA gapped up on the open and fell rather quickly on earnings news. Support was around 7.50, and I rationalized that if it fell below that point and then that price became new resistance, that this would be a good place to enter a short trade. This did occur, but very very quickly, and I was overwhelmed by the spread at the time (nearly 2%). I decided to skip the trade. It currently would have given me about a 5% profit. I also had on my watchlist a few candidates for breaking out on unusual volume. One of these was ROCM, which I daytraded on unusual volume last Friday. It was sitting just below its 50 MA and just below a high set back on July 9th. Since the 50 MA could have been a strong resistance point, I had been reluctant to hold it over on friday and instead got out. I still think this was a good decision. However, this morning it started to move again on volume that was comparable to Friday's and I considered getting in at around 15.50, which would have left me with a 2% cushion if it hesitated near July 9th's high of 15.83. I should have taken this trade when unusual volume was at 25% of 65day volume, around 10:10 or so, but I had hesitated again and walked away from the computer. It is currently about 9% above where my entry would have been. Another stock that I was watching early on was TRCR. This one was hitting the right numbers for unusual volume according to the chart, price was up since friday and all other indicators were good. However TRCR had been moving on significant volume over the past 5 days, and compared to these levels, volume was relatively low indicating to me that it wasn't going to move much. I decided to pass on this trade, and so far that appears to have been a good decision. Since I'm still in the paper trading phase I'm not going to get too upset over missing these trades, but it would have been really nice to have these gains listed on my practice sheet. I think the lesson here is to stop hesitating when I see the signals line up.